Prognostics and Health Management (PHM) technologies for potential application on aircraft engines have been maturing rapidly in recent years due in part to initiatives supported by the Joint Strike Fighter program. Incorporation of new technologies such as PHM on product applications must be justifiable on the basis of cost versus benefit, i.e. affordability. This paper describes the development of a cost benefit analysis methodology to assess the effectiveness of PHM technologies on aircraft engines with respect to both financial and operational metrics to assist in making the appropriate case for product implementation. The methodology utilizes traditional reliability and logistics source information. This data is combined with fleet-wide operational metrics such as aircraft delivery schedules, projected usage, etc., and basic parts cost information to generate specific life cycle costs and operational impacts for specific PHM system capabilities.